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According to a study by Bankrate, the average American pays more than $1700 in auto insurance per year. The amount you pay depends on a variety of factors: household size, state of residency, and the number of cars you own.
With the cost of just about everything increasing this year, insurance rates are no exception — Bankrate claiming an increase of about 5% in the coming year.
Thankfully, there are ways to combat the rise in auto insurance prices. Here are five ways you can save on car insurance without sacrificing coverage.
1. Safe Driver Discounts
Most, if not all auto insurance providers offer lower prices for safe drivers with no accidents. Why? Because insurance providers charge a monthly fee to cover accidents — fewer accidents mean they make more money from premiums. Insurance companies can also see if you received a ticket for speeding, which is a leading cause of accidents.
Even the safest drivers are still a risk in the eyes of auto insurance companies. Accidents can happen to anyone, even cautious drivers. But the fewer accidents and tickets you have on your record, the lower your premium.
Showing the insurance company a report of safe driving can result in a lower price. In fact, companies like State Farm, Farmer’s, and Travelers offer “safe driver discounts” which reward drivers who have a record of clean driving for a specified period of time.
2. Drive Less
We all have places that are only accessible by car, whether it’s because of distance or design. However, the less you drive the more you save on car insurance. There’s a direct link between driving time and the probability of an accident.
If you’ve been lowering your vehicle miles traveled (VMT), ask your insurance company about pleasure use discounts.
Hot Tip: Driving less also can help you save on wear and tear costs and gas. Try to drive less when possible and use public transportation if it exists near you!
3. Install An Anti-Theft Device
Sometimes you need to spend money to save money. Auto insurance companies offer discounts for vehicles with an anti-theft device.
A stolen car is one of the biggest expenses a car insurance company can face — often costing tens of thousands of dollars or more! Auto insurance discounts are all about how much risk you can mitigate from the insurance company. An anti-theft device that lowers the probability of your car being stolen can cut your premiums.
4. Shop Around
When was the last time you compared auto insurance rates? Chances are, there are savings to be found by shopping around.
Auto insurance companies are always looking for new customers. If you’re willing to change companies for the same coverage, you could find a better deal.
If you’re unsure of where to start, check out this tool by Cheap Auto Savings that gets your vehicle information and finds you the best deal for the coverage you are looking for. This tool has saved Americans thousands of dollars in auto insurance costs, check it out here.
5. Bundle Your Coverage
Are you paying for multiple forms of insurance with separate policies? If you are, consider bundling all of your coverage with the same company. Many insurance companies give a discount to customers that bundle their insurance.
For example, State Farm will bundle auto, home, and life insurance, offering a healthy discount on each. If you are paying for multiple forms of insurance, ask for a bundle discount! It could save you hundreds of dollars each year!
Bottom Line
There are a few very easy ways to save on your auto insurance policy. Whether it’s changing your driving habits, installing anti-theft devices, or bundling up, there are easy-to-find discounts for you to save.
